Canadian retail spending rises sequentially in July, GDP likely to grow around 2.2 pct in Q3 2018

Canada’s retail spending rose in July. Sequentially, retail sales rose 0.3 percent. In spite of a stumble in June, the gain in July was enough to send nominal sales to a new high. Excluding price effects, the volume of goods sold was effectively flat. Stripping the swing factors of auto and gasoline sales, a rise of 0.7 percent was recorded.

Beyond these swing factors, it was a generally positive month for sales in major categories. Gains at food and beverage stores and clothing stores aided to counter some falls at health/personal care stores and general merchandise retailers. Region wise, gains were broad based, with eight provinces recording increased sales. Manitoba and B.C. recorded drops.

Beneath a modest headline lay decently positive details. Excluding the noise of volatile auto and gasoline sales, there was another month of positive gains in both nominal and volume terms. Today’s data suggests that the economy continues to perform well in spite of a number of headwinds, noted TD Economics.

“We continue to track third quarter GDP growth around the 2.2 percent mark or slightly above, consistent with our latest economic forecast. That retail spending is holding up despite a string of interest rate increases should give the Bank of Canada confidence that the Canadian consumer continues to manage higher borrowing costs”, added TD Economics.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 6.16652, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -4.61709. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex